Since growing hemp has been illegal for almost a full century, researchers have been unable to learn all the benefits associated with it. Hemp is a distinct variety of the cannabis plant but it is not the same as marijuana. Although hemp is commonly associated with marijuana, it should not be.
The benefits associated with hemp are endless. Several products which are used by people every day can be created from hemp. These include paper, clothing, building materials, fuel, and nutrition.
The best part about growing hemp is the conditions which it can grow under. If you look at pictures of New York from the mid-1900s, hemp was growing everywhere. Hemp has multiple growing seasons and it can be grown in some of the toughest environments. Researches have estimated that the Florida hemp industry could be a $460 million-dollar industry per year.
Capitalizing on Hemp
Industrial hemp and marijuana are two completely different plants, inside and out. Hemp contains a very small amount (less than 1%) of tetrahydrocannabinol (THC), the primary psychoactive ingredient in marijuana (the chemical that gets a user high). Legal cannabis has a much larger amount of THC (between 15%-30%).
The surge in the number of publicly traded cannabis companies has made it difficult for investors to focus on legitimate investments in the industry. One of these is a NYSE-traded holding company, Compass Diversified Holdings (CODI).
The company offers investors the opportunity to invest in a company levered to the industrial hemp industry and offers a dividend.
What Does Compass Do?
Compass owns and manages a diverse family of established North American middle market businesses. In July, CODI finalized the acquisition of Fresh Hemp Foods Ltd., for $132.5 million (CAD) and sold its CamelBak Products, LLC subsidiary to Vista Outdoor Inc.
Fresh Hemp was founded in 1998 in Winnipeg, Canada and operates under the name Manitoba Harvest. The company produces and sells its products online and through retail stores in North America. Manitoba offers hemp hearts, heart bites, protein powders, oils, and food starter packs.
Manitoba’s products are currently carried in approximately 7,000 retail stores across the United States and Canada. During the fiscal year that ended on November 30, 2014, the company generated $37.9 million (CAD) in revenue, which represents a 23.9% increase on a year-over-year basis. Manitoba has continued to see significant revenue growth during the first half of its current fiscal year and they generated $27.6 million of revenue during this time.
CODI offers investors an 8.3% dividend yield or $1.44 in cash distributions per year. The company’s dividend has grown consistently over the years and its financial stability is secure, especially after the sale of its CamelBak subsidiary.